Protestors plead for R.I. to default on debt

PROVIDENCE – Protesters unhappy with the state’s ultimately doomed investment in 38 Studios LLC urged Rhode Island leaders last week to default on the money the state owes for the deal, The Associated Press reported. More

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Protestors plead for R.I. to default on debt

Posted:
Saturday, June 1, 2013 12:05 am

PROVIDENCE – Protesters unhappy with the state’s ultimately doomed investment in 38 Studios LLC urged Rhode Island leaders last week to default on the money the state owes for the deal, The Associated Press reported.

Supporters of defaulting on the 38 Studios bonds say insurance on the investment will pay bond holders the more than $100 million the state owes. About 20 of them marched to the Statehouse on May 28 and met with state Reps. Karen MacBeth and Spencer Dickinson, the AP said. Both legislators favor legislation that would prohibit the state from paying the money.

Proposals to default have so far gained no traction in the General Assembly and are opposed by Gov. Lincoln D. Chafee, the AP said.

The R.I. Economic Development Corporation board in 2010 approved the loan guarantee for 38 Studios with the hope of luring high-paying jobs from Massachusetts to Rhode Island.

38 Studios filed for bankruptcy last year, leaving the state on the hook for more than $100 million. Chafee’s budget proposal calls for the state to make a $2.5 million bond payment in the fiscal year beginning July 1, followed by annual payments of $12.5 million.

EDC also opposes defaulting on the bonds, say it could make it more difficult to finance future projects and hurt the state’s bond ratings. •

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